MAY 13 INDEX UPDATE
--------------------------
Short-term technical readings:
DOW - midrange
SPX - midrange
OEX - midrange
NAZ - lower midrange/borderline oversold
NDX - oversold
VIX - oversold
Per my short-term technicals the overall market is in the midrange. As mentioned often, prior to an important announcement(FOMC meeting) it is common that my short-term technicals end up in the midrange, whether its right at the FOMC meeting or a few days before.
Its interesting that I am getting oversold readings in the NDX/NAZ with such a small decline in the indexes, that in itself is a hint of bullishness.
As mentioned previously, there are bearish and bullish formations developing(bearish wedge, rounding top, inverted H&S), so there mixed signals in the various chart formations concerning the direction of the market.
Concerning the VIX, in relation to my short-term technicals, - the VIX and the indexes are not in line. Im also noticing a DESCENDING TRIANGLE on the VIX. Im interpreting those factors as a possibility that the VIX could drop significantly, which would be bullish for the market.
In no way am I wildly bullish on the market, but right now I am leaning JUST SLIGHTLY to the bullish side as to the direction of the market after the FOMC meeting. I did say slightly. So slightly that it wont change my current position of staying hedged.
Right now my personal mutual fund account is now about 93% cash, since I closed a short position on FRIDAY. I am still hedged but now Im every so slightly net long. So slightly that its a matter of only hundreds of dollars. As for my trading account, Im planning an exit strategy for some of my gold positions, and for my biotech & small cap positions I may hedge them. So, although Im slightly more bullish, for reasons mentioned above, my current trading strategy is far from being firmly bullish - basicly its pretty much an evenly hedged position.
Its kind of obvious that the market is coiling, and its common that eventually there will be a big move in one direction or another. The biotech that Im playing is SGMO, which, historically has had strong oscillations. Now look at the last 13 days where it has remained flat around 15. Tell me that SGMO aint getting ready to make a strong move in one direction or the other, and Im also unsure of the direction. I mention it just as an illustration, not a recommendation to buy. |
